Brazilian Court Confirms Ternium's Obligation to Pay Indemnification in connection with its 2012 Acquisition of a Participation in Usiminas; the Decision is subject to Further Appeals
Rhea-AI Summary
Ternium S.A. (NYSE:TX) faces a legal setback as the Brazilian Superior Court of Justice (SCJ) rejected a motion filed by Ternium subsidiaries and Tenaris's Confab to reverse a June 2024 decision. The court ordered the T/T Group to pay indemnification to Companhia Siderúrgica Nacional (CSN) regarding their 2012 Usiminas acquisition.
The SCJ modified the monetary adjustment mechanism and capped attorney's fees, reducing the potential payment. Ternium Investments could face approximately BRL1.9 billion ($307 million) in payments, while Ternium Argentina could owe BRL0.7 billion ($109 million). Ternium maintains that CSN's claims are meritless and plans to pursue further appeals.
Positive
- Court's modification of monetary adjustment mechanism reduced the potential payment amount
- Company maintains legal options to appeal the decision
Negative
- Potential liability of $416 million combined for Ternium subsidiaries
- Legal setback with rejection of motion to reverse previous court decision
- Ongoing legal uncertainty affecting company operations
News Market Reaction
On the day this news was published, TX gained 3.08%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
LUXEMBOURG / ACCESSWIRE / December 6, 2024 / Ternium S.A. (NYSE:TX) announced that the Brazilian Superior Court of Justice (SCJ) published today its unanimous decision to reject a motion of clarification filed by Ternium's subsidiaries Ternium Investments and Ternium Argentina, together with Tenaris's subsidiary Confab (all of which compose the T/T Group under the Usiminas shareholders agreement), that had sought to revert the June 18, 2024 SCJ decision ordering the T/T Group to pay Companhia Siderúrgica Nacional, or CSN, an indemnification in connection with their 2012 acquisition of a participation in Usiminas.
Notwithstanding the foregoing, the SCJ unanimously resolved to modify the applicable monetary adjustment mechanism and to cap the applicable attorney's fees, thereby lowering the aggregate amount that would be payable by the T/T Group if CSN ultimately prevails in its claims. Assuming monetary adjustment through November 30, 2024, and BRL5 million in attorney's fees, in each case as determined pursuant to the SCJ decision published today, the revised aggregate amount potentially payable by Ternium Investments and Ternium Argentina would be of approximately BRL1.9 billion (approximately
Ternium continues to believe that all of CSN's claims and allegations are unsupported and without merit, and that in connection with the Usiminas acquisition the T/T Group was not required either to launch a tender offer or to pay indemnification to CSN. Accordingly, Ternium Investments and Ternium Argentina intend to continue to defend their rights vigorously and to file all available motions and appeals against the SCJ decisions that ordered an indemnification payment.
Forward Looking Statements
Some of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium's control.
About Ternium
Ternium is a leading steel producer in the Americas, providing advanced steel products to a wide range of manufacturing industries and the construction sector. We invest in low carbon emissions steelmaking technologies to support the energy transition and the mobility of the future. We also support the development of our communities, especially through educational programs in Latin America. More information about Ternium is available at www.ternium.com.
CONTACT:
Sebastián Martí
Ternium - Investor Relations
+1 (866) 890 0443
+54 (11) 4018 8389
www.ternium.com
SOURCE: Ternium S.A.
View the original press release on accesswire.com
FAQ
What is the total potential indemnification amount Ternium (TX) might have to pay in the Usiminas case?
When did the Brazilian Superior Court of Justice reject Ternium's (TX) motion in the Usiminas case?
What was the original acquisition year that led to Ternium's (TX) current legal dispute?
